Correlation Between Pfizer and Inhibrx

Can any of the company-specific risk be diversified away by investing in both Pfizer and Inhibrx at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Pfizer and Inhibrx into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pfizer Inc and Inhibrx, you can compare the effects of market volatilities on Pfizer and Inhibrx and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Pfizer with a short position of Inhibrx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfizer and Inhibrx.

Diversification Opportunities for Pfizer and Inhibrx

0.21

Correlation Coefficient

Pfizer  Inhibrx

Modest diversification

The 3 months correlation between Pfizer and Inhibrx is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Pfizer Inc and Inhibrx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inhibrx and Pfizer is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Pfizer Inc are associated (or correlated) with Inhibrx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inhibrx has no effect on the direction of Pfizer i.e., Pfizer and Inhibrx go up and down completely randomly.

Pair Corralation between Pfizer and Inhibrx

Considering the 90-day investment horizon Pfizer Inc is expected to under-perform the Inhibrx. But the stock apears to be less risky and, when comparing its historical volatility, Pfizer Inc is 3.2 times less risky than Inhibrx. The stock trades about -0.04 of its potential returns per unit of risk. The Inhibrx is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  3,218  in Inhibrx on July 21, 2024 and sell it today you would lose (1,618) from holding Inhibrx or give up 50.28% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Pfizer Inc  vs.  Inhibrx

Pfizer Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pfizer Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Pfizer is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Inhibrx

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Inhibrx are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental drivers, Inhibrx showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pfizer and Inhibrx

The main advantage of trading using opposite Pfizer and Inhibrx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfizer position performs unexpectedly, Inhibrx can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Inhibrx will offset losses from the drop in Inhibrx's long position.

The idea behind Pfizer Inc and Inhibrx pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.